Copart faces patent lawsuit
Manheim Services Corp., one of
the largest used auto sales companies in the U.S., is suing Copart,
Inc. for using their patented auto auction format on their website.
Manheim claims Copart is using
technology patented by Manheim to sell salvage vehicles and no
consent was sought.
The U.S. District Court in Atlanta
received the filing which describes in detail how Copart's online
auction technology allegedly infringes on Manheim's patent.
Upon visiting their sites, both
appear to use a format similar to eBay's auctions.
Copart sells damaged vehicles,
usually for insurance companies and formerly operated live auctions
out of it’s 133 nationwide locations. Copart only recently
moved to online auctions to take advantage of the widened customer
Regarding the lawsuit, Copart
issued a press release that states the lawsuit is "without
merit" and promised to "vigorously defend its position."
Manheim demands that Copart stop
using its online technology and to pay damages.
According to Manheim, it "has
been and will continue to be seriously damaged and irreparably
injured" by Copart's actions.
Copart made record sales after
introducing Virtual Bidding Second Generation, or VB2, in December
2003. Because of the reduced operation costs, Copart's annual
revenues topped $400 million for the first time.
The growth in sales and profits,
Copart executives have said repeatedly, is due to the popularity
The system allows Copart to sell
vehicles all over the world, instead of taking bids only in person
at the local auctions held at Copart’s various auction sites.
Manheim's auction system is called
Simulcast. It allows dealers to bid remotely online and buy vehicles
as they are moving through live auction lanes.
Manheim contributed to sales
of $3.5 billion worth of vehicles to online buyers since their
beginning just two years ago. Last year alone saw over 200,000
The companies claim they were
the first to develop their online auction system.